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ASEAN : Making Sino-Japanese Competition Work.

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SIIA is a non-profit and independent organisation dedicated to the research, analysis, and discussion of regional and international issues. Founded in 1961, the SIIA is Singapore’s oldest think tank.

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Simon S. C. Tay

Moving ahead with the ASEAN Economic Community: business initiatives across borders. 2015/10






The competition between China and Japan to become Asia’s next leader has spurred these regional powers to adopt extensive engagement strategies for the region. This include a whole gamut of trade and infrastructure initiatives targeted at funding projects to improve the region’s overall connectivity.

For example, China’s initiative to launch the Asia Infrastructure Investment Bank is aimed at raising capital for large scale projects that will help to narrow Asia’s infrastructure gaps. China has pledged an initial capital of US$ 100 billion to the AIIB, with an additional total of US$ 50 billion pledged by the rest of the 57 member countries.

The Japanese have also pledged to invest US$ 100 billion to the ADB, which will support high quality infrastructure projects in Asia. The ADB focuses on subregional zones such as developing ports and industrial zones in Myanmar, as well as other infrastructural upgrading projects in Vietnam, Cambodia, Malaysia and Thailand.

The injection of fresh capital into infrastructure projects in the region makes ASEAN’s goals to improve its infrastructure and connectivity much more attainable.

The ability for ASEAN member states to manage and evaluate offers and proposals to fund high profile projects will become increasingly crucial especially as competition for economic influence in the region between countries such as China and Japan heat up. By means of economic diplomacy or otherwise, both will attempt to assert their influence and shape the region to suit their own strategic interests.

Instead of allowing investors or multilateral financiers to drive and dictate regional projects, governments need to play a leadership role to carefully evaluate the offers made by these stakeholders and align them to the country and region’s overall long term development agenda.